The Federal Anti-monopoly Service (FAS) in Russia is preparing to take action against brokers that are operating in the country without a license. Just after the long-awaited regulatory framework in Russia kicked in earlier this month, Russian authorities are making pledges to take control of the market.
There is no clarity as to exactly what measures the authority is preparing to take against foreign brokers operating in Russia. However it appears that the primary effort will be directed towards local companies that are operating in the country without a license.
Russia was developing its regulatory framework for forex brokers for several years before it came into force earlier this month, enabling regulated brokers to advertise their products.
At present the Russian market is heavily fragmented, with a number of brokers that do not have a Russian license still managing to attract customers despite not being able to officially advertise. Brokers that are based outside of Russia have a good chance of attracting clients because they are sometimes regulated by institutions which are located outside of the country.
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Russian retail clients deem an FCA license a much more trustworthy stamp of approval than that of the Bank of Russia.
Initial reports suggest that the Russian FAS will submit its recommendations in the third quarter of this year. While there is still some time until then, foreign brokers could look at certain limitations with regard to dealing with Russian clients.
The information has been provided in a roadmap on the development of financial markets which was coordinated between the FAS and the Bank of Russia.
According to the document, proposals of legislative changes will be introduced in order to prevent unlicensed brokers from on-boarding clients. The measures are said to be including the organization of educational efforts such as courses and seminars.
The Russian FAS says that the measures should lead to a more competitive environment in the forex trading services market.